Archive for April, 2025

• Morning News: April 2, 2025
  Eddy Elfenbein, April 2nd, 2025 at 7:05 am

  Trouble with a Capital ‘T’

  Trump Is Set to Unveil Expansive Global Tariffs

  How ‘Liberation Day’ Might Go Down

  Here’s How Former USTR Tai Will Scrutinize Trump Tariff Day

  China’s Tariff-Dodging Move to Mexico Looks Doomed

  A Canadian Company’s Tariff ‘Double Whammy’ Highlights Trouble for the Economy

  Could Tariffs Raise $700 Billion a Year? Not Without Pain

  U.S. Factory Activity Retreated in March on Tariff Concerns

  An American Mine Still Has Millions of Tons of Copper, If Companies Can Get to It

  Wall Street Is Rewriting Its Energy-Sector Playbook

  US-Led Cooperation Beats Conflict Every Time

  Investors Bet Clarity on Tariffs Will Bring Stability to Markets

  Goldman Picks Yen as Top Hedge Against US Recession, Tariff Risk

  Wall Street Trading Desks Warn S&P 500 Selloff Will Get Worse

  Michael Bloomberg: America Is Headed for a Grim Fiscal Reckoning

  Consulting Giants Offer Billions in Cuts to Federal Contracts. It Might Not Be Enough.

  Inside Elite Law Firms, Protests and Quitting After Trump Deals

  Visa Bids $100 Million to Replace Mastercard as Apple’s New Credit Card Partner

  Tesla Sales Are Slumping, Even in the Most E.V.-Friendly Place

  A Big Coal Plant Was Just Imploded to Make Way for an AI Data Center

  Trump Set to Meet With Top Aides to Decide TikTok’s Fate

  More Americans Can’t Afford Medical Care, Gallup Poll Finds

  Walmart Keeps Price Pressure on Suppliers After Beijing Pushback

  Ben & Jerry’s Co-Founder Calls on Unilever to ‘Set Us Free’

  Chuck Todd Wants You to Meet the Pods

  Tinder’s Flirting AI Chatbots Play Hard to Get

  The Hottest Denim Brand of the ’00s Turns to Hip-Hop for Its Resurrection

  Be sure to follow me on Twitter.

• CWS Market Review – April 1, 2025
  Eddy Elfenbein, April 1st, 2025 at 6:23 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Yesterday was the last day of trading for the first quarter of 2025. Overall, it was a tough quarter for the stock market. For the first three months of this year, the S&P 500 lost 4.59%.

  

  This broke a five-quarter winning streak for the market. Going back further, the S&P 500 turned a profit in eight of the last nine quarters, not counting the first quarter of 2025.

  At the very beginning, the market got off to a nice start this year. By February 19, the index was up close to 4.5% for the year. Since then, however, things fell apart.

  It really has been a tale of two markets — before February 19 and after. Before 2/19, the market acted very much as it had for several months. The risky stocks were doing well, and the conservative stocks lagged behind. After February 19, the script flipped. It’s the risky areas of the market that haven’t been doing well while conservative sectors are having their moment in the sun.

  Here’s a remarkable stat. Despite the overall market’s loss during Q1, 305 stocks outperformed the index, and the average stock lost 0.89%. In plain English, the big boys were finally feeling the pain. Most other stocks did just fine.

  Yesterday was a very unusual trading day because the market started out very weak, but it gained strength during the trading day. At one point, the S&P 500 was trading below its close from March 13, which suggests that the market correction isn’t over.

  Also during yesterday’s market. the S&P 500 traded below 5,600 and reached its lowest intra-day level in more than six months. In fact, the S&P 500 is very nearly flat for the last nine months. Think of it this way: six months of gains were wiped out in the last six weeks.

  There’s an ETF I like to track, the Roundhill Magnificent Seven ETF (MAGS), which is probably the best proxy for the “Magnificent Seven” stocks. The MAGS ETF lost nearly 16% during Q1. Here’s a look at MAGS (in black) versus the S&P 500 (in blue).

  

  The real difference this year is that stocks based outside the United States are finally doing well while the U.S. market is trailing. For several years, the U.S. market was beating up on everyone else. I heard many predictions that this would turn, and they were all wrong. Now they finally may be right.

  One area of the market that’s been weak and doesn’t seem to be getting any better is small-caps. The Russell 2000 Index of small-cap stocks fell to its lowest point relative to the S&P 500 since 2001. Gold beat the S&P 500 by 23.6% in the first quarter.

  This was a very good quarter for our Buy List, at least in a relative sense. Through the end of closing on Monday, the Buy List gained 0.89%. No, that’s not a huge gain, but it’s a lot better than the 4.59% loss for the overall market, and we did it while using a lot less risk.

  Our “beta,” which is a measure of risk, was just 0.664 during Q1 which is quite conservative. Our biggest winner this year is Cencora (COR) which gained 23.8% during Q1. Other big winners were American Water (AWK, +18.5%), Abbott Labs (ABT, +17.3%) and Rollins (ROL, +16.6%).

  Here’s how the ETF (in blue) has done over the past three years versus the S&P 500 (in red):

  

  Wall Street is still very concerned by the White House’s tariff policies. Tomorrow is “Liberation Day” according to President Trump. We’re still not exactly clear on the details of President Trump’s plans for tariffs, and that’s probably why the stock market has been on edge.

  The president has shown some signs of wanting to work with our economic partners in order to avoid increased tariffs. I really can’t guess what will happen. President Trump did impose some tariffs in his first term, but those were fairly small. He appears to be planning something much larger this time.

  My foremost concern is how much damage there has been to the economy. So far, it’s not much, but that could soon change. There appears to be a disconnect in the economic data. The “soft” reports meanings things like surveys, consumer confidence and the stock market are alarmed. The “hard” data like jobs and GDP are holding up well.

  Goldman Sachs recently raised its inflation forecast for this year to 3.5%. Goldman also cut its GDP growth forecast for this year to 1%. The bank also raised its unemployment target for this year to 4.5%.

  On Tuesday, we got the ISM Manufacturing Index figure. For March, the ISM was 49.0. Any number below 50 signals a contraction. The ISM had been above 50 for the prior two months, but before that, it had been below 50 for 26 straight months. Generally speaking, recessions have aligned with ISM levels closer to 45. While this is a poor report, it’s not alarming.

  There are a few more reports to look out for this week. Tomorrow, ADP will release its report on private payrolls. Wall Street expects a gain of 120,000. That’s not that much.

  Wall Street also expects a gain of 0.3% for average hourly earnings. That’s also not that great. It’s basically in line with inflation.

  On Thursday, we’ll get the initial claims report. The consensus on Wall Street is for 226,000. Then on Friday comes the March jobs report. On Wall Street, the monthly jobs report is the biggie. Economists expect a gain of 140,000 of nonfarm payrolls. If that’s right, it would be lower than three of the last four months.

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: April 1, 2025
  Eddy Elfenbein, April 1st, 2025 at 7:03 am

  European Gas Price Falls as Injection Season Kicks in

  Europe Faces Daunting Quest to Replenish Gas Reserves After Frigid Winter

  EU Has Plan to Retaliate on U.S. Tariffs, Von der Leyen Says

  China Says It Is Aiming to Coordinate Tariff Response With Japan, South Korea

  How Trump’s Tariffs Are Hitting One Chinese Factory Owner: ‘We Are Helpless’

  Trump Administration Tallies Trade Barriers That Could Prompt Tariffs

  Want to Play a Game? Global Trade War Is the New Washington Pastime.

  Trump Says He Settled on ‘Liberation Day’ Tariff Plan, but Doesn’t Reveal It

  Trump Advisers Battle Over Whether ‘Liberation Day’ Will Raise Tariffs or Lower Them

  Reciprocal Tariffs? We’ve Seen This Movie Before

  This Mexican Border Town Had Chaotic Trade-War Dress Rehearsal

  Stocks Mark Worst Month in Years as Trump’s Tariffs Loom

  New Quarter, Same Problems

  US Recession Worries Raise ‘Gray Swan’ Risk for Bond Investors

  The Coming Recession Will Be Self-Inflicted

  Goldman’s Big Bonuses for CEO, President Deemed ‘Poor Practice’ by ISS

  Bill Ackman Becomes Chairman of Bremont After Lifting Stake

  No Toilet Paper and No Privacy: Returning to the Office, Federal Workers Walk Into Chaos

  As Trump Stokes Uncertainty, the Fed Asks Businesses Where It Hurts

  Chipotle Went on a Seven-Year Quest to Find Avocados Outside of Mexico

  US Chip Grants in Limbo as Lutnick Pushes Bigger Investments

  OpenAI Finalizes $40 Billion Funding at $300 Billion Value

  Hydrogen Trucking Companies Are Going Under

  Ford Is as American as Apple Pie. Or Is That Honda?

  What’s So Hard About Building Trains?

  Nintendo Departs From Its Founding Philosophy With Switch 2

  Amazon’s New Movie Strategy Starts With Theaters

  Be sure to follow me on Twitter.